One senior Lib Dem source said: “The Liberal Democrats have consistently blocked Conservative attempts to freeze benefits for the working age poor, just as they have blocked our attempts to cut benefits for the wealthiest pensioners.

“Decisions on benefit uprating should be taken at fiscal events and in light of the fiscal circumstances.

“It speaks volumes about the priorities of the Conservative Party that they see benefit cuts for the working age poor as a crowd-pleasing punch line for a conference speech.”

The move has also caused controversy among anti-poverty campaigners.

Matthew Reed, chief executive of the Children’s Society said: "The chancellor’s plan to freeze working-age benefits is a brutal blow to millions of families already hit hard by repeated cuts to critical support.

"This cap would extend the period of the 1% squeeze on families to half a decade - a typical family could lose as much as £1,300 per year by 2018 as a result."